05 October 2009 by Jim
The Forum of Private Business (FPB) feels that the government needs to do more to help small businesses retain staff and avoid redundancies.
It’s called for modifications to the Working Tax Credit Scheme to support shorter working hours and wants planned increases in employment costs frozen. (Working Tax Credits apply to employees on a low income or who are responsible for a child who is under 16.)
"The administrative structures are already in place to modify Working Tax Credits to allow for the retention of key and skilled staff on shorter working hours," said Phil Orford, chief executive of the FPB.
"This process should be based upon the actual hours worked, with income validated by the employer, rather than the current scheme's method of basing calculations on the previous year's earnings."
Changes would be in addition to the new £2,500 subsidy introduced for employers who take on and train people who have been unemployed for at least six months.
Orford said that the subsidy is “very welcome, but many small businesses are concentrating on trying to keep hold of their skilled employees. This should also form a central pillar of the Government's support strategy.”
The FPB also called for National Minimum Wage to be frozen to “help protect jobs”, and wants the 0.5% increase in National Insurance Contributions by 2011 proposed in last November Pre-Budget Report to be scrapped.
We agree with the FPB that the government definitely needs to focus on staff retention, for the sake of both employers and employees. But in addition to that, it needs to offer extensive guidance on how to make staff part-time in a way that is financially viable to both employer and employee, possibly even introducing financial and tax relief to ease the situation for everyone involved and open up as many ways as possible to avoid redundancy.